Telefonica says no deal with BlackRock over Telecom Italia

MILAN/MADRID Thu Dec 19, 2013 1:47pm EST

People are reflected as they walk past Spanish telecom group Telefonica's flagship store in central Madrid November 8, 2013. REUTERS/Sergio Perez

People are reflected as they walk past Spanish telecom group Telefonica's flagship store in central Madrid November 8, 2013.

Credit: Reuters/Sergio Perez

MILAN/MADRID (Reuters) - Telefonica (TEF.MC) said on Thursday it had no agreement with BlackRock (BLK.N) over Telecom Italia (TLIT.MI) as it sought to dispel concerns it was maneuvering behind the scenes ahead of a shareholder vote over control of the Italian phone group.

Telecom Italia's shareholders meet on Friday to decide whether to oust the board in an attempt by dissident investors to weaken the increasingly powerful influence of Telefonica. The outcome of the vote is uncertain.

BlackRock emerged as Telecom Italia's second-biggest investors this week with a stake of around 10 percent, giving it a potentially pivotal role in the Telecom Italia vote.

Italy's market regulator Consob has questioned the U.S. money manager's stake disclosures and is trying to ascertain whether the U.S. fund acted on its own, or in agreement with other parties, including Telefonica.

"Telefonica has no agreement with BlackRock in relation with Telecom Italia," Telefonica said.

In a statement to Spain's stock market regulator, Telefonica also said it had neither bought nor had any plans to buy any shares with voting rights in Telecom Italia.

Under a shareholder agreement, Telefonica is banned from increasing its almost 15 percent indirect stake in Telecom Italia unless another shareholder controls more than 10 percent of the capital of the Italian firm.

Telefonica and a group of Italian financial institutions control Telecom Italia through investment vehicle Telco, which owns 22.4 percent of the Italian phone company.

Telefonica recently secured an option to gradually take over the stakes of its partners in Telco from 2014. (Reporting by Danilo Masoni and Julien Toyer, editing by William Hardy)

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